Why Every Penny of the Government's Extra £300m for Childcare Must Go Straight to the Nursery Floor

The Chancellor, George Osborne, has allocated £300m more to the childcare sector in his Spending Review.

This translates to central government putting in place a new, better, average hourly rate of £4.88 for free places for three and four-year-olds offered to parents in England.

An increase had already been promised by the government. It's the only way to make its forthcoming expansion of free hours from 15 to 30 per week workable for the nurseries, childminders and schools set to deliver it.

But now the big question is: "Will that money get through to the front line where it's needed so badly?"

At the moment, NDNA nursery members receive an average of £3.80 per child per hour. This doesn't cover costs for the vast majority.

It falls short of what nurseries need by £800 per year on average, per funded three and four-year-old place - money that must be made up through higher fees for paying parents.

On the face of it, £4.88 looks like a good deal and offering more government-funded hours to meet new demand could be a more sustainable proposition for nurseries as a result.

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It's certainly a significant step forward after a long NDNA campaign for more money. Don't get me wrong, we welcome it.

But it's not as much as it seems. For a start, the sum includes the Early Years Pupil Premium that nurseries have already been receiving since April 2015, equating to an extra 53p per qualifying child per hour.

On top of this, there's a real danger that as the funding travels through council distribution channels and is fed through the schools funding formula as part of a wider education budget, the amount that finally reaches the nursery floor could be significantly less.

We can't let this happen. After months of lobbying and consulting on hourly rates to influence the Spending Review, NDNA is back on the case.

Early next year the Department for Education will begin two consultations, one on the way the local authority nursery funding system works and the other on the proposed fair funding formula for schools.

We'll be making large-scale contributions to these and also conducting our own consultation among members on how they want NDNA, councils and Government to support them to deliver the 30 free hours.

Another outcome of the Spending Review was a tightening of eligibility for 30 free hours per week to parents who each work at least 16 hours per week each and earn less than £100,000.

The Guardian reported that this would cut the number of qualifying families from as many as 600,000 to 390,000.

That's still a lot of extra places to be found and NDNA's own research with Netmums revealed that the vast majority of parents intend to claim their free hours in full.

Nurseries can deliver more free hours only if that doesn't result in more losses to make up elsewhere.

The reality is that the government will become our sector's biggest customer in 2017 when full roll-out of childcare reform is here.

But it has to pay us fairly if it wants us to deliver high quality care and education sustainably. The funding has to be sufficient.

No-one embarks on running a nursery to turn a big profit. People go into this business because they care deeply about early years education and quality childcare.

They want to create vibrant, happy places of learning and nurturing, of active days fuelled by fresh and healthy food. Places that really make a difference for the children who go there, getting the best possible start in their life outside the home.

All nurseries want is for their sums to add up and their books to balance.